Central Retail Corporation Public Company Limited (CRC) Earnings Call Transcript & Summary

[Foreign Language] Good afternoon, investors and analysts. And today, welcome, everyone, to Central Retail business and performance update. And here for the quarter of -- third quarter 2024. And as usual, my name is Rangsirach, Head of Investor Relations, CRC. I'll be your host for today. And for the next 90 minutes, we will equally split the time for the management presentation, and we'll take your questions later. And allow me to pass on to Kun-Yol to start.

Good afternoon. Welcome. Thank you for joining us today. I think before we dive into our agenda today to discuss about Q3 performance, I want to take a moment to officially introduce Khun Ty-san, who will be succeeding me as the CEO of CRC effective from May 2025. He actually is sitting next to me. Khun Ty-san, he has more than 30 years of retail experience. Okay. I would say that, he want more. He is truly professional and also a key member of CRC family. He has a proven record of strategic vision and also official excellence. His leadership of Central Home Group, okay, he is a great example. He built, fixed and scale and finally established as the #1 industry leaders. Before that, he also pioneered to create a successful category killer for Central Retail, first in-home appliance known as Power Buy. And after that, also, he went to help to turn around Supersports business from loss-making to be a profitable one. Over the next 5 to 6 months, Khun Ty-san and I will work together closely to ensure that a smooth and seamless transition. And I am fully confident that CRC will continue to reach a new high under his leadership. Please welcome Khun Ty-san and allow him to say a few words before we start our Q3 performance.

Thank you, Kun-Yol, and everyone, for welcoming. Thank you, Kun-Yol, for the past 9 years that you have been leading CRC throughout the COVID period. And building a very strong omni retail channel for CRC. With all the trust that everyone is giving me, I and the team, we will continue building and innovating CRC, capture the new market together for the customer, and for all the stakeholders. During this transition period, I will work closely with Kun-Yol to make sure that I will catch up all the works. And from there, I will move forward and drive CRC into the next chapter. Thank you, everyone.

Thank you Khun Ty-san. Okay. Let me go back to switch to him. Okay. [Foreign Language]

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Let's wrap up Thailand. Vietnam [indiscernible], Khun Olivier, you can start for the Thailand -- actually, sorry, you can start for the Vietnam.

Thank you very much, Khun Panet. Let's go to the macroeconomic development of Vietnam, which continue to show a positive signal in terms of being the top in the rank of GDP growth with a quarter up to 7.4%. We should land this year between 6.8% and 7%, which will make us the top country, let's say, in the region in terms of growth. It's coming through, let's say, different factors. One of those factors is the international visitors. We've been able to be above now 2019, so pre-COVID in terms of tourists, including international, but as well local tourism is also working very well, especially in the center. Import/export also quite good, especially when we talk about export with up to 16% almost year-on-year, mainly coming from electronics and parts that are also developing well nowadays. Another key indicator that we follow is the business, the local business confidence. And here, we see that we are a net creation or, let's say, re-opening business at plus 20,000 roughly versus last year, which demonstrates that small entrepreneurs continue to invest in Vietnam and create employment. When we move to our Property and GO! Mall, you'll see that by the end of this year, we will continue to increase our footprint. We started the year being present in 29 provinces, and we'll finish the year with 32 provinces, thanks to the mall opening, but as well the Mini go! opening that we will have till the end of this year. Traffic is also doing well. I mean, we have 10% year-on-year for the first 9 months of the year. We will definitely overshoot this year, more than 100 million visitors in our mall. And when we look at the fundamental, let's say, of our Property, the rental income of the occupancy, we see as well that we are improving versus 2023, increasing our occupancy from 83% to 84%, but as well our rental income growing by 6% since the beginning of the year. So to go through the expansion and to give you a little bit some picture of what we have done, we have opened a GO! Bac Lieu on the 23rd of October, very successful opening there as well, with an occupancy reaching more than 90%, which is 11% above the budget. I'd just like to mention that we've never built so many mall actually in Vietnam since the beginning of our journey in the country. We had this year five mall ongoing and under construction. Three will be open, and have been open -- and will be opened, sorry, in '24. Bac Lieu was the second one. The third one will be Ninh Thuan. And next year, we will open Hung Yen and Yen Bai that are under construction and really in good progress. I should mention also that we continue to renovate and to rebrand our portfolio of mall. Two of the major ones are under renovation. And I'm talking here about Thang Long, which is the biggest mall and hypermarket in Vietnam. And Dong Nai, the permit is finalizing. We will start as soon as we receive all the authorization. And it should be a remodeling that will last until, let's say, mid or the third quarter of '25. Sharing with you some nice picture of the successful opening in Bac Lieu for the next slide, please. You see a very crowded mall there. It's mainly due to the concept that we bring with a lot of F&B experience, we are over reaching, let's say, is it in terms of mall occupancy, but as well in terms of hypermarket, our expectation in this mall, which give us a lot of confidence for the future of our concept in Vietnam. If we move to the Food Retail as such, we see there that we continue to grow and to gain profitable market share. I'm repeatedly talking about profitable market share. It's very important. Our supermarket and hypermarket format is among the top profitable format in Vietnam, and this is where we need to continuously invest. And when I look at our market share development, since the beginning of the year, we were still able to gain 1.1% market share, reaching a 38.7% of market share, which is very, let's say, big and important in the country, especially in that format. We lost a little bit total modern trade. It's mainly due to the mini-mart growth that we have currently on this market. Profitable growth because we were able actually to gain market share, improving as well our fundamental in terms of profitability and in terms of OpEx control, which give us a growth of our EBITDA of 100-basis-point and EBIT with 110-basis-point, which is, to me, as well a very nice achievement. Continue to push our leadership also in terms of omnichannel with a 12% contribution, which is coming from -- 90% coming from our own, let's say, sales channel, like, the telesales, but as well our app. And we continue, as I mentioned, to have a strong double-digit growth with a plus 23% in the third quarter of this year. So our hypermarket format is working very well, but as well our Mini go! format. So we can move to the next slide. We see there that we will be present in 37 province, with our hypermarket and Mini go! format. We will finish with 14 Mini go! by the end of this year. We opened lately in the center, in An Nhon, very successful also store opening. And we will finish this year with three additional opening in December in the center, but as well in the south of Vietnam. Successful model with a very strong double-digit like-for-like growth, reaching almost 20%. And lastly, I'd like to finish with the Vietnam and Lifestyle sport (sic) [ Vietnam Lifestyle & Sports ] update. We brought this year a new brand, Fitflop with quite as well a good performance, plus 74% versus last quarter. We launched that brand actually in March. So we are still listening, but actually, it's quite promising. Crocs still doing very well, thanks to a very good portfolio and network of store with a plus 30% versus last year. Dyson also very successful nowadays with a plus 45% versus last year overshooting as well as budget. And finally, the Sports business that we have here in the country, doing plus 17%, but with a very strong omnichannel performance at plus 65%. So that's for the update of Vietnam.

Thank you. Khun Olivier. I think [Foreign Language]

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